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Playing the wireless waiting game
ISP agents expect huge opportunities in reselling and integrating wireless
Reprinted from ChannelWEB/CRN.com
by Charlotte Dunlap
ISP agents have been waiting patiently for carriers and ISPs to roll out packages to support wireless data communications, but some are finding opportunity in little-known wireless service providers.
Many ISP agents recognize the potentially huge opportunity in reselling and integrating wireless services, but say they are forced to take a wait-and-see position. That's because carriers have not yet offered wireless packages geared toward data communications with flat-rate pricing.
But some aggressive ISP agents have sniffed out seemingly lucrative business deals.
Cost is still a barrier to wireless communication connectivity. John Williams, president of SafeNET, an Atlanta-based ISP agent, is excited about reselling the wireless services of MobileStar Network. The Richardson, Texas-based company already has cut a deal with American Airlines to equip all of its Ambassador Clubs with wireless capabilities for its customers and now is aggressively cutting deals with major hotel chains.
"At the Crown Plaza Ravinia Hotel in Atlanta, I can walk into the lobby with my PC and get T1 speeds [through a wireless connection]," Williams says. He uses this and other examples to pitch the service to his customers. In return, MobileStar gives Williams a percentage of the monthly subscription fee for each new customer he signs.
"If I get 500 people signed up, I can sit home, never do anything and get six figures," Williams says. These figures would amount to about $100,000 annually for 500 customers. Williams plans to roll out a program to resell the wireless services in January, but declined to give the details of his strategy.
The broadband aspect is the most appealing to ISP agents. One agent, who used to be a road warrior, says it was frustrating to get to a hotel and try to work on a PowerPoint presentation at 56K modem speeds.
ISP agent Mike Hadley, president and chief executive of Boston-based iCorps Technologies, is still waiting on his main ISP partner, UUNET, to get its wireless service up and running. Hadley, whose finance and venture capital clients are located primarily in Boston and New York, expects the service to be rolled out at his locations during the first half of 2001. "There is no doubt about it. Once we feel it's a proven technology, we're going to offer it," Hadley says.
When it comes to taking advantage of the new connection technologies, many companies feel the stranglehold of the local providers. Those offering broadband technologies, including DSL, xDSL and ISDN, often require a long waiting period before connecting the service.
"Part of the problem with Internet connectivity is with the local providers. They seem to be the stumbling block," says Hadley. The ability to cut out that local loop is big, especially for small companies, he says.
ISPs playing in the wireless space agree, and long for any data communications service they can offer on their own.
"When we,the ISP,create a wireless link to our customer, we're in complete control. We can deliver the service, if the hardware's in stock, in two days vs. having to go through leased lines and get the phone company involved and taking two weeks," says Lee Kelso, vice president of sales and marketing at SkyeNet, a South Bend, Ind.-based ISP. "From a revenue standpoint, that's all gross margin coming to me."
Cost remains the major barrier to wireless data communications connectivity.
Daniel Gallagher, director of network services for AAA Networks, Falls Church, Va., and a leading ISP agent in the mid-Atlantic, anticipates growing interest in the market, but believes it is being held up because most carriers offering wireless services are charging a per-minute rate, similar to voice charges, vs. a flat-rate service as offered on data communications services.
According to Gallagher, wireless is still at the curiosity level among his customers. "No one is saying, 'we want it for 40 of our road warriors,' so we're still setting up dial-up accounts," he says.
Analysts, ISPs and ISP agents agree carriers eventually will offer flat-rate wireless data communications packages. This more affordable pricing structure, along with wireless capabilities being made available in more and more metropolitan areas and cities throughout the country, will inevitably spur growth.
In-Stat Group estimates that increasing availability of wireless data communications services led the worldwide mobile computing device market in 2000 to grow 36 percent from 1999. The December 2000 report added that by 2004, more than 51 percent of mobile computing devices shipped will be wireless-enabled.
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